What direct mail marketers can expect from an improving economy
Businesses have an increasing number of options of ways to reach consumers, and each avenue has its benefits and drawbacks. Direct mail marketing is a traditional method for advertising and outreach that has provided companies with sustained return on investment. Whether sending out flyers, coupons or product samples, most businesses were forced to make difficult choices during the economic recession regarding what type of mailer would be most effective for their purposes.
Coming out of difficult times
The industry research firm IBISWorld indicated many organizations, especially small businesses, reduced their marketing budgets, resulting in a 1.2 percent decrease in demand for direct mail advertising resources between 2008 and 2013. However, IBISWorld reported there is renewed interest in direct mail for marketing purposes. Some of the recent policies of the U.S. Postal Service are more friendly for businesses, especially those that provide rate reductions for bulk mail.
In addition, the research firm indicated corporate profit margins are on the rise, which will likely result in increased revenue for marketing budgets. In fact, the Direct Marketing Association's "Statistical Fact Book 2013" indicated direct marketing expenditures in the U.S. are expected to reach $196 billion by 2016. One of the reasons many companies are turning to direct mail is largely due to the response rates generated through this channel. Both business-to-business and business-to-consumer direct mail appeals resulted in a 4.4 percent response rate in 2012, according to Direct Marketing News. This is important considering the amount of mail consumers handle on average per week.
Accurate addresses needed
The DMA also indicated 31.3 percent of letter-sized envelopes were read by households in 2011, while postcards were read about 53 percent of the time. Over the course of months and years, consumers are exposed to an incredible amount of direct mail marketing, and consumers tend to read the majority of it. One essential fact to keep in mind with this data is the importance of address verification software when conducting a direct marketing campaign. Because undertaking a bulk-mail campaign can be labor-intensive, it's important to make sure there are as few errors as possible in addressing consumers.
According to 41 Pounds, transportation costs are about $500 million per year on average. Even a fraction of those costs spent on letters or envelopes that were mislabeled can negatively influence a company's bottom line. Moreover, the consumer meant to receive the information has no way of knowing they missed out on a deal or business opportunity. While the economy continues to improve, businesses will likely be able to invest in direct mail campaigns, benefiting their entire organizations.